In February 2003, 450 economists, including 10 of the 24 living Nobel laureates in economics, made a public plea to President George W. Bush not to enact the recent tax cuts passed by Congress. These tax cuts, officially called the Jobs and Growth Tax Relief Reconciliation Act of 2003 but forever known as the Bush-era tax cuts, would not do what they promised, the economists argued. Instead, they said, the cuts would "worsen the budget deficit, increase inequality, decrease the ability of the U.S. government to fund essential services, while failing to produce economic growth."

In the nearly 10 years that have elapsed since that plea, the budget deficit has ballooned, the gap between the wealthy and the middle class has expanded, and the American economy has spiraled into the greatest decline since the Depression. History has proved the 450 economists were correct. On Dec. 31, these same Bush-era tax cuts are set to expire. This, we are told in hushed or hysterical tones, could push the American economy off a "fiscal cliff."

Am I missing something here? Can letting a failed tax policy die be such a bad thing?

Not really, says the Congressional Budget Office. In fact, if we let these tax rates expire, the debt would rise but the increases would be reduced by more than $7 trillion, or 70%, over the next 10 years. This reduction in the deficit would happen so fast, the CBO writes, that the gross domestic product could slow in the first six months of 2013 to 0.5% — probably causing a recession — before catching its breath in the second half of the year and starting to return to a respectable 2.4% growth.http://www.latimes.com/news/opinion/commentary/la-oe-shakely...

As they say in the NFL, “on further review,” I’ve decided that going over the “fiscal cliff” is a good idea.

And no, it’s not because I want to pay more in taxes. Nor am I a disgruntled Republican longing for revenge for the election. And I didn’t just win the Powerball jackpot, and I didn’t get an early bonus to avoid the coming tax increases.

It would reveal who perped the lie that the Bush Tax cuts were only for the wealthy. It would reveal the Demo talking points on this trash for what it is. It would reveal that continuing to tie the wealthy with the Bush tax cuts by eliminating their benefit of some 43 Billion $$, but keeping intact everyone else's 288 Billion $$ is catering to both the lie and to the masses and accomplishing nothing fiscally.

"It would reveal who perped the lie that the Bush Tax cuts were only for the wealthy. It would reveal the Demo talking points on this trash for what it is. It would reveal that continuing to tie the wealthy with the Bush tax cuts by eliminating their benefit of some 43 Billion $$, but keeping intact everyone else's 288 Billion $$ is catering to both the lie and to the masses and accomplishing nothing fiscally.

If eliminating all of the Bush Tax cuts return some 330 Billion dollars ( numbers from the CBO) but only eliminating the tax cuts for the "wealthy" return only 42 Billion (also from the CBO), WTF are you talking about? 288 Billion went to the non wealthy and 42 Billion went to the wealthy.

"And the coming "cliff" will address both ends of that equation. It's not enough to fix it, but it's a start. "

I think Poorguy needs a math lesson. When you add 50 billion in spending, it is not subtraction. So, how is 1.6 trillion in new tax revenue and 50 billion in new spending addressing "both ends of that equation"?

Giving you the benefit of the doubt, what $50B in spending? There are fairly drastic cuts in defense and other programs, plus a non-renewal of the "doc fix" which will cut the amount paid to doctors by the government.

Where's the spending (from the Budget Control Act of 2011, which set up this "cliff" for us)?

" There are fairly drastic cuts in defense and other programs, plus a non-renewal of the "doc fix" which will cut the amount paid to doctors by the government."

If true, means more Doctors WILL be dropping Medicare patients. Yeah, this is a solution;-)

"Where's the spending (from the Budget Control Act of 2011, which set up this "cliff" for us)? "

The spending cuts "from the Budget Control Act of 2011" is exactly what they are trying to avoid. So, Obama wants 1.6 trillion in new tax revenue, which he will be lucky to see even half that amount, if his plan goes thru, but more importantly he wants an additional 50 billion in stimulus spending(Keynesian economics has never worked) while offering 400 billion in unspecified Medicare cuts. This amount might bewhat you are talking about with regard to the "doc fix". If that goes thru, Medicare is toast. More likely, those cuts won't go thru. So, we end up with 50 billion more in spending.

Ah. So it's not the cliff, it's what Obama wants. I was referring to the "cliff" (assuming we go over it, which I expect we will). OK. Different things.

And Keynesian has always worked when applied (that I'm aware of). Heck, Bush II just before he left office applied some (followed by Obama doing more) and it pulled us back from the precipice of a severe depression. Ditto back during the Depression of 80 years ago. Austerity during hard times, however, has been shown repeatedly not to work. Both here and abroad (most recently by Greece).

I saw an interesting article about this a few weeks ago, but can't find it quickly. If I find it again I'll post it.

" Heck, Bush II just before he left office applied some (followed by Obama doing more) and it pulled us back from the precipice of a severe depression. Ditto back during the Depression of 80 years ago. Austerity during hard times, however, has been shown repeatedly not to work. Both here and abroad (most recently by Greece)."

Gee, this must be true because 0bama said the porkulus bill he passed kept us from going into a depression. Who cares about empirical evidence? If 0 says it, it's flat-out true! Never mind too that we did not have more economic growth in an amount larger than the amount of the porkulus which Keynesian economists promised it would do.

Heck, if government spending returns more in economic growth than the amount of government spending, the gubmint should just spend $1 trillion dollars per hour and we will be more prosperous than in any time in history.

To the extent that it has ever been applied (which has never been "completely"), yes it did. Most recently in 2008/09 when we were on the verge of a vast depression. I'm not going to argue that all the monies spent were spent wisely (they weren't), but there is little doubt the stimulus begun by Bush-II and expanded by Obama saved us. Most economists I've read seem to agree if the stimulus had been more (and better allocated) we'd be in even better shape today than we are.

During the Reagan years he increased spending. A lot. The economy really heated up (and many were complaining even then that "of course you can live well if you do everything on your VISA card"). He juiced us right out of the Carter doldrums (though some would argue his policies were leading us out anyway, but I was young enough that I wasn't paying attention yet so can't say for sure). But most of Reagan's spending was on the military, so it didn't sustain (because it didn't foment growth) and Bush-I paid the price with a weak economy in his term. Reagan also started us on the path that led to 2008 (anti-regulation, "government IS the problem", etc).

Going back further, elements of Keynesian policies were applied throughout the post-war years with great success. The interstate highway system was a huge spending project that created jobs and fomented growth. There were others. It worked quite well until the oil shock and stagflation of the 70s.

Going back a bit further than that, the Great Depression. Attempts at austerity during that time made things worse. Attempts at raising revenue such as Hawley-Smoot made things worse. The New Deal and some of the massive public works projects created jobs and got money circulating, lessening the effects of the Depression. And then the biggest government spending of all (up to that time) was the War, with all the materiel that was needed. Yanked us completely out of the Depression.

The free-wheeling policies advocated by most conservatives today are what caused the Great Depression, and also are what almost caused another one in 2008.

You'll note I mentioned "to the extent" at the top. That's because there's a flip-side which is almost NEVER implemented, namely accumulation during good times. We never do that. No one seems to (that I know of). They just let the national debt ride, instead of paying it down as they should. I don't know if you're old enough to remember, but I am...when Clinton produced a budget surplus the members of Congress (both parties) were falling all over themselves to spend it. They had ZERO interest in paying down the debt, and they didn't. That is the single biggest failing of Keynesian thought: it missed the reality of human nature and politics when it comes to debt management. However, it absolutely nails the concept that money must flow or an economy will die. If business and consumers aren't spending, government must to prevent a disaster. Time and again (just in our history) this has been shown to be true. Instead, today, people want to cut spending in a weak economy. Just like Greece did. That worked out really well for them (not!).